Let me set out my stall. Long before Labour came to government, I was firmly on the side of PPPs. I attribute this to having worked closely with John Prescott, who was responsible, more than any other politician, for recognising the need for some innovative thinking about how to finance the scale of public investment that an incoming Labour government was going to put in place.
Our particular interest at that time was the railways, where it was glaringly obvious that neither the mad-cap privatisation – which John and I worked together to resist – nor the conventional approach of fighting for a share of the public expenditure cake was going to deliver the billions of pounds of investment that our sadly neglected railways would require. How right we were.
But it was the same in every other branch of our national infrastructure. When Labour came to power in 1997, there was a £19bn backlog in repairs to social housing and £7bn for schools. One-third of the buildings used by the National Health Service were built before the NHS existed. Before a ball could be kicked on improving services, we had to tackle the legacy of gross under-investment.
Only a knave or a fool would pretend that we could have done so by conventional public expenditure means. If that was the route we had followed, we certainly would not be looking at a £40bn investment – and that mostly means construction – programme by 2003/4. The only sensible decision was to augment conventional funding, which still applies to most projects, by harnessing private finance for public purposes. In other words, PPP.
Only a knave or fool would pretend we could tackle the legacy of underinvestment by conventional public expenditure means
There is not much opposition to PPP in the communities where it delivers schools and hospitals. The monthly meeting of my own constituency Labour Party recently discussed the subject at the behest of a trade union delegate who was bitterly opposed to the whole concept. His views were doubtless sincere but, in my view, utterly misguided. It was quickly pointed out that we have acquired locally a wonderful new further education college through PPP and an ambitious schools programme is in preparation. Were we to renounce all that? The answer was overwhelmingly in the negative.
But perhaps the most dismissive response to our colleague's entreaties against PPP was when he summoned up some supposed horror story about a hospital project that was funded through the new system. This was a bad example to choose since the hospital that serves my constituency, Crosshouse, is one of the greatest horror stories in the history of public procurement. It was more than a decade late and a continuing disaster area, in terms of construction and maintenance – for which the taxpayer picks up the tab.
And that is where the reactionary nature of the anti-PPP argument comes to the fore. In order to attack it, critics of PPP defend the system that we have been used to – which was frankly indefensible. They love to offer lifetime costings of a PPP project, which has to pass a stringent value-for-money test, but never think of counting the lifetime costs – real, not hypothetical – of all these botched projects where there was no continuing involvement demanded of the people who built them.
Brian Wilson is the minister for construction at the DTI.